Minimum Wage

Minimum Wage paystub meaning: The lowest hourly rate an employer may legally pay. Federal is $7.25; where a state or city sets a higher rate, the higher...

The lowest hourly rate an employer may legally pay. Federal is $7.25; where a state or city sets a higher rate, the higher rate wins.

The federal minimum wage is $7.25 an hour, effective July 24, 2009. That is a floor, not the rate most people are paid. States and cities set their own, and where more than one applies, the worker gets the highest. On the Department of Labor's state table updated July 1, 2026, the spread is wide: the District of Columbia at $18.40, Washington at $17.13, New York at $17.00 in New York City, Nassau, Suffolk and Westchester and $16.00 elsewhere, California at $16.90, Massachusetts at $15.00, Florida at $14.00. Several states set their own rate at exactly $7.25 — Texas, Pennsylvania and Wisconsin among them — so the federal floor is the real rate there. Five others, Alabama, Louisiana, Mississippi, South Carolina and Tennessee, have no state minimum wage law at all, so covered workers there fall back on the federal $7.25. Tipped work runs on different arithmetic. Federal law lets an employer pay a cash wage of $2.13 an hour and claim a tip credit of up to $5.12, provided tips actually bring the worker to $7.25 for the workweek. When they do not, the employer must make up the difference by the regular payday. A tipped employee is one who customarily and regularly receives more than $30 a month in tips. Eight jurisdictions — Alaska, California, Guam, Minnesota, Montana, Nevada, Oregon and Washington — allow no tip credit and require the full state minimum in cash. One legal rate sits below all of this: a youth minimum wage of at least $4.25 an hour for employees under 20, for their first 90 consecutive calendar days with an employer. Those are calendar days, not days worked.

Payroll and labor-law terms can vary by jurisdiction and by the facts of a particular job. This definition is an orientation, not legal advice; current federal, state, local, union, and employer rules may all matter.

When this term appears on a statement, read its label, current amount, year-to-date amount, pay-period context, and any adjacent rate or hours together. Resolve a mismatch with the original issuer or the cited authority rather than changing a record to force a preferred result.